China: U.S. Carriers Unsafe in South China Sea

As war rages on in central Europe, a potentially far bigger conflict remains largely overshadowed in the media. 

Taiwan, which now looks imminently poised to become the next point of contention between the (real) superpowers, has been looking on for the last few weeks as the People’s Liberation Army (PLA) Navy conducted a massive military exercise in the East China Sea. 

The exercise, as most military exercises do, had a dual purpose. 

The first, and most visible, was to further hone the crews and operational efficiency of the PLA Navy, including its 1,000-foot Shandong aircraft carrier. 

The second, more implied purpose was to show the U.S. Navy — whose Nimitz carrier strike group held their own exercises in the South China Sea last week — that the PLA wasn’t going to be pushed around in its own backyard. 

One of the key features of the exercise was the live-fire testing of one of China’s "carrier killer" hypersonic ballistic missiles. 

The End of American Naval Dominance?

Missiles like the DF-17, as pictured below in its mobile launcher, can put a conventional or nuclear warhead on a ship-sized target from 1,000 miles away in about 11 minutes, launch to impact.

The warhead, carried within a terminal-stage "glide" vehicle, makes its final approach at around 4,000 miles per hour, giving shipborne defenses very little time to respond. 

When these are launched en masse, which is precisely the ideology adopted by the PLA, no U.S. carrier group will be safe. 

There have been a few times in the history of military technology when single advancements render entire military doctrine obsolete. 

In fact, during the Second World War, the aircraft carrier itself was responsible for sweeping aside the battleship, which had held the throne as the king of naval vessels for centuries. 

With hypersonic missiles like China’s DF-17 and Russia’s Mach 10-capable air-launched KH-47M2 Kinzhal, hundreds of billions of dollars' worth of hardware, not to mention the training and assignments of tens of thousands of naval personnel, could be rendered useless.

When the Going Gets Tough… The Tough Go to the Bank

Good thing our Department of Defense doesn't typically go for the useless and helpless approach.

When in doubt, the answer is always to achieve parity by spending more, and this case is no exception.

Our own hypersonic missile program has been a primary concern at the Pentagon for some time now. 

Almost $5 billion in spending for research and development has already been earmarked for this year alone. 

Last week, this heightened attention started to show signs of bearing fruit, as the U.S. Army deployed a hypersonic missile battery in Florida as part of a wider launch rehearsal. 

In the coming months and years, hypersonic missiles are going to get more than their fair share of attention from the press, analysts, budget administrators, and, perhaps most importantly, investors. 

The biggest defense contractors out there are scrambling to fill this demand, but within the inner circles of the DoD, there is one big name that stands out. 

It’s a company that made its name building high-performance rocket engines and will likely lead the way in domestic high-altitude precision munition development for years to come. 

There Are No Recessions in Defense

I know this because my colleague Jason Simpkins has been following this story since long before the mainstream media gave it any attention at all. 

He’s an expert on defense and has been writing about our frightening technical disparity with China for years now. 

Markets like this don’t come around often. 

Indeed, they’re often overshadowed by the geopolitical crises that create and feed them. 

The smart money, however, doesn’t get scared or anxious. 

It recognizes the opportunity, makes logical plays, and waits patiently. 

Jason knows everything there is to know about this market, the catalysts driving it, and the company that's perfectly positioned to take advantage of the capital inflows. 

He’s boiled it all down into this brief video presentation.

It’s quick and it’ll give you the full picture of both what this means for the world and what it could mean for your bottom line. 

No login or registration required. It’s 100% free, and access is instant. 

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Fortune favors the bold,

Alex Koyfman

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His flagship service, Microcap Insider, provides market-beating insights into some of the fastest moving, highest profit-potential companies available for public trading on the U.S. and Canadian exchanges. With more than 5 years of track record to back it up, Microcap Insider is the choice for the growth-minded investor. Alex contributes his thoughts and insights regularly to Energy and Capital. To learn more about Alex, click here.